Breaking: Repo rate remains unchanged at 6%

The Reserve Bank of India's Monetary Policy Committee presented its last bi-monthly policy review for the current fiscal on Wednesday and kept repo rate unchanged at 6 per cent.

The Reserve Bank of India (RBI) kept its key interest rate unchanged at 6 per cent for the fourth time in succession at its final bi-monthly monetary policy review of the fiscal, citing concerns about the inflationary push by rising global crude oil prices.

Announcing the policy review, the RBI said its decision is consistent with the neutral stance of the central bank aimed at achieving its median inflation target of 4 per cent.

The continuing rise in food and fuel prices pushed India's annual retail inflation rate over the five per cent mark in December 2017 to 5.21 per cent, from 4.88 per cent in November 2017.
It was assumed that Reserve Bank was likely to keep repo rate unchanged at 6 per cent for the third straight time in the upcoming policy review.

The Monetary Policy Committee (MPC) mett on February 6 and 7 and the outcome was announced on Wednesday.

"It's almost a given that the RBI will hold the repo rate steady when it concludes this week's policy meeting. The upside risks to inflation in the coming quarters suggest that the RBI will have to lift the policy rate eventually, but not just yet, particularly if it does not want to kill the nascent economic recovery," BNP Paribas had said in a report.

The report said inflation in FY18 seems to be benign enough, averaging 3.7 per cent but in the next financial year it expects headline CPI to rise to 4.8 per cent - within the upper half of RBI's 4-6 per cent target range.